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Why is the "premium" on generic gold at 14 year lows?

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  • BAJJERFANBAJJERFAN Posts: 31,082 ✭✭✭✭✭
    edited March 2, 2017 10:11AM

    @cohodk said:
    If they sold it for spot minus 79c, what would be the true value of silver? Spot -79c, spot, or spot +79c?

    Why does it even matter since PM pricing is fluxional and variable? As soon as it goes off sale your purchase could be worth more or if spot drops the next day it would likely be worth less.

    Another thing. If I buy an ounce of gold for $20 over what is the true value of gold? If I'm a little spendier and buy 10 ounces at $10 over what is the true value of gold? If I buy the same ounce of the same gold at $50 under from a CraigsList ad, what is the true value of gold?

    theknowitalltroll;
  • TwoSides2aCoinTwoSides2aCoin Posts: 44,293 ✭✭✭✭✭

    @BAJJERFAN said:

    @cohodk said:
    If they sold it for spot minus 79c, what would be the true value of silver? Spot -79c, spot, or spot +79c?

    Why does it even matter since PM pricing is fluxional and variable? As soon as it goes off sale your purchase could be worth more or if spot drops the next day it would likely be worth less.

    Another thing. If I buy an ounce of gold for $20 over what is the true value of gold? If I'm a little spendier and buy 10 ounces at $10 over what is the true value of gold? If I buy the same ounce of the same gold at $50 under from a CraigsList ad, what is the true value of gold?

    Answer : about $20 less than yesterday

  • BAJJERFANBAJJERFAN Posts: 31,082 ✭✭✭✭✭

    @TwoSides2aCoin said:

    @BAJJERFAN said:

    @cohodk said:
    If they sold it for spot minus 79c, what would be the true value of silver? Spot -79c, spot, or spot +79c?

    Why does it even matter since PM pricing is fluxional and variable? As soon as it goes off sale your purchase could be worth more or if spot drops the next day it would likely be worth less.

    Another thing. If I buy an ounce of gold for $20 over what is the true value of gold? If I'm a little spendier and buy 10 ounces at $10 over what is the true value of gold? If I buy the same ounce of the same gold at $50 under from a CraigsList ad, what is the true value of gold?

    Answer : about $20 less than yesterday

    Yeah. I noticed that APMEX cut their price, A LOT! :)

    theknowitalltroll;
  • derrybderryb Posts: 36,823 ✭✭✭✭✭
    edited March 4, 2017 4:04PM

    @cohodk said:
    If they sold it for spot minus 79c, what would be the true value of silver? Spot -79c, spot, or spot +79c?

    True value of the silver remains unchanged. Value of the currency has changed.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • BAJJERFANBAJJERFAN Posts: 31,082 ✭✭✭✭✭

    @derryb said:

    @cohodk said:
    If they sold it for spot minus 79c, what would be the true value of silver? Spot -79c, spot, or spot +79c?

    True value of the silver remains unchanged. Value of the currency has changed.

    Typically, people change the price/value of what you are buying and not what you are buying the item with.

    theknowitalltroll;
  • BaleyBaley Posts: 22,660 ✭✭✭✭✭

    @derryb said:

    @cohodk said:
    If they sold it for spot minus 79c, what would be the true value of silver? Spot -79c, spot, or spot +79c?

    True value of the silver remains unchanged. Value of the currency has changed.

    LoL, is that why the US dollar buys 3 times as much silver today as it did in 1979?

    Liberty: Parent of Science & Industry

  • BaleyBaley Posts: 22,660 ✭✭✭✭✭

    It is usually fallacious to say that there is a "true value" of anything. All prices and markets are local, and they fluctuate.

    What's the True Value of a gallon of clean water? Well, that depends on where you are, and how long since you've had a sip.

    Liberty: Parent of Science & Industry

  • cohodkcohodk Posts: 19,127 ✭✭✭✭✭

    @Baley said:

    @derryb said:

    @cohodk said:
    If they sold it for spot minus 79c, what would be the true value of silver? Spot -79c, spot, or spot +79c?

    True value of the silver remains unchanged. Value of the currency has changed.

    LoL, is that why the US dollar buys 3 times as much silver today as it did in 1979?

    That was a long time ago....even before Microsoft, or the interent. A time when price discovery was via postcards, with stamps!!!

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • EagleEyeEagleEye Posts: 7,677 ✭✭✭✭✭

    Apparently there are large hoards from Europe still coming to market. Once they are graded, there is no efficient marketing to sell them at higher premiums. Is there any way to look at the PCGS population changes month-to-month? It would be interesting to follow the population increases for the 1924 and 1927 St. Gaudens $20.

    Rick Snow, Eagle Eye Rare Coins, Inc.Check out my new web site:
  • cohodkcohodk Posts: 19,127 ✭✭✭✭✭

    Consensus seems to be too much supply from Europe. So do the Europeans not believe gold is "insurance" or safety, or an asset to protect them in the event of a currency crises. Some believe the Euro is in much worse shape to weather a storm than the dollar, so why aren't the Europeans buying gold?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • SangoSango Posts: 177 ✭✭✭

    I'm not sure why, but I'm absolutely pleased by it, as the eagles and double eagles are some of my favorite series ever, and I've never really had the opportunity to play in this market, but I will be in the coming months. My plan is to stack the less rare years in pcgs ms63, and look at them a lot :)

    I have a few new AGE's, including a pf70uc NGC, but we all know numismatic-speaking, these will never be pre-33 gold lever rare, nor cool.

  • rawteam1rawteam1 Posts: 2,472 ✭✭✭

    @cohodk said:
    Consensus seems to be too much supply from Europe. So do the Europeans not believe gold is "insurance" or safety, or an asset to protect them in the event of a currency crises. Some believe the Euro is in much worse shape to weather a storm than the dollar, so why aren't the Europeans buying gold?

    Is consensus from people who don't know, really concensus at all?...

    keceph `anah
  • derrybderryb Posts: 36,823 ✭✭✭✭✭
    edited March 5, 2017 10:32PM

    @cohodk said:
    Consensus seems to be too much supply from Europe. So do the Europeans not believe gold is "insurance" or safety, or an asset to protect them in the event of a currency crises. Some believe the Euro is in much worse shape to weather a storm than the dollar, so why aren't the Europeans buying gold?

    You're interpretation of the consensus is incorrect. While some common date $20 gold US coins may be arriving from europe, europeans are buying gold more than ever. Export of any product to US does not mean oversupply in europe. At best it means a bigger market or better prices.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • cohodkcohodk Posts: 19,127 ✭✭✭✭✭

    It might behoove gold bugs to graph the rate of fiat money creation compared to gold production. Interesting stuff. ;)

    Premium drops when there is oversupply....there is oversupply.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • BAJJERFANBAJJERFAN Posts: 31,082 ✭✭✭✭✭

    Maybe some patriotic stiff wants to repatriate American gold coins!

    theknowitalltroll;
  • jmski52jmski52 Posts: 22,850 ✭✭✭✭✭
    edited March 7, 2017 2:00PM

    _A modern AGE is just a lump , no one example means anything more than another. No history behind it , no date means anything to anyone no one will demand 2014's over 2010's who cares . _

    Actually, that's not really the case. There are dates that command higher premiums, just like with $20 Saints. By the way, what's the history behind a 1924 Saint? Better yet, pick a date and tell me the history.

    The story used to be that any old gold would be exempt from a new confiscation order as "collectible" coinage. I don't see that as valid anymore, since the whole modern bullion production was offered by the government to the public for investment, and all of the West Point production has been designated as "collector coinage".

    Just sayin.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • bronco2078bronco2078 Posts: 10,225 ✭✭✭✭✭

    @jmski52 said:
    _A modern AGE is just a lump , no one example means anything more than another. No history behind it , no date means anything to anyone no one will demand 2014's over 2010's who cares . _

    Actually, that's not really the case. There are dates that command higher premiums, just like with $20 Saints. By the way, what's the history behind a 1924 Saint? Better yet, pick a date and tell me the history.

    The story used to be that any old gold would be exempt from a new confiscation order as "collectible" coinage. I don't see that as valid anymore, since the whole modern bullion production was offered by the government to the public for investment, and all of the West Point production has been designated as "collector coinage".

    Just sayin.

    I don't doubt there are a few people putting together date sets of modern gold I'm sure but not because they are in love with them. There are about 7 people doing that and they have thousands of coins apiece for every date. They read that book "Modern Commemorative coins" and probably bought a bunch of ugly commemorative dollars also because they looked at the charts and bought into the semi- key nonsense.

    One theory is as good as the next I suppose but the guy that wrote that book cashed his paychecks a long time ago and he doesn't care if he was wrong or not. He will write another book if he is short of cash I'm sure.

  • jmski52jmski52 Posts: 22,850 ✭✭✭✭✭
    edited March 7, 2017 6:48PM

    I remember my first take on the coin collecting phenomenon was, "why would anybody pay more than a penny for a 1924-D Lincoln Cent? Note that my next thought was, "if I can find one of those, I'll be rich!" Only after I'd looked through thousands of Lincolns did I come to appreciate what a nice VF Lincoln looks like.

    The reasons I buy modern bullion are twofold - I think it's smart to accumulate bullion, and I like collecting a date set of modern bullion with a relatively low premium structure while I'm busy accumulating. Along the way, it's become apparent that the old relationships between price and scarcity apply in modern bullion just as they apply for old gold or any other collectable coins.

    ericj96 is an engineer if I recall correctly, and his book simply used some good analytical techniques in making educated guesses about what new issues might develop the highest premiums due to scarcity. His book has some valid analyses, although the market took a dive just after it was published. I can't think of much in the book that isn't still valid.

    The interesting thing is that modern bullion hasn't been marked up and resold with embedded dealer markups a few dozen times over the years like most classic coins. The values aren't pigeonholed by a small cartel of dealers.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • jmski52jmski52 Posts: 22,850 ✭✭✭✭✭

    Back to the OP, the lower premiums are across the board for classic and modern bullion both. The reason is because collecting has taken a backseat to basal value.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 19,127 ✭✭✭✭✭

    @jmski52 said:
    Back to the OP, the lower premiums are across the board for classic and modern bullion both. The reason is because collecting has taken a backseat to basal value.

    And I believe that to be a good thing.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • SangoSango Posts: 177 ✭✭✭

    If moderns are more valued just due to purity standpoint, then why not skip the premiums altogether on coins and go Pamp/Perth bars? They're at least as stunning as an ASE if not more so, more pure (same as buffalo), but are available in 1/5/10/100gr sizes, which is much more useful/useable in scenario of SHTF. They aren't US currency, but at $50, yeah I'm never using it for that. (Much less a classic gold slabbed, nah)

    Just an idea. Way. Way. Better value and price. Over all moderns.

  • SangoSango Posts: 177 ✭✭✭

    Modern US bullion will not be all that "collectible" in my opinion in this world. No circulation, quaspbillions minted, almost all specimens perfect. I know what the rarer ones ask for in a 70 slab, just don't think it holds. Just my take tho.

  • TwoSides2aCoinTwoSides2aCoin Posts: 44,293 ✭✭✭✭✭
    edited March 8, 2017 6:00AM

    Go long on gold. I put $1000 dollars cash in the bank in 2009. And I bought an ounce of gold for $1000 8 years ago, too. The fees at the bank turned my cash into less. The gold ounce is now worth $200 more. And that's with zero premium added. Go figure. Everyone's experience and timing may be different.

  • BAJJERFANBAJJERFAN Posts: 31,082 ✭✭✭✭✭
    edited March 8, 2017 11:41AM

    @TwoSides2aCoin said:
    Go long on gold. I put $1000 dollars cash in the bank in 2009. And I bought an ounce of gold for $1000 8 years ago, too. The fees at the bank turned my cash into less. The gold ounce is now worth $200 more. And that's with zero premium added. Go figure. Everyone's experience and timing may be different.

    Some would say [even in retrospect] that neither of those options was a wise choice. Had you put the $1,000 into your dresser drawer instead of the bank, you'd still have $1,000.

    theknowitalltroll;
  • cohodkcohodk Posts: 19,127 ✭✭✭✭✭

    @BAJJERFAN said:

    @TwoSides2aCoin said:
    Go long on gold. I put $1000 dollars cash in the bank in 2009. And I bought an ounce of gold for $1000 8 years ago, too. The fees at the bank turned my cash into less. The gold ounce is now worth $200 more. And that's with zero premium added. Go figure. Everyone's experience and timing may be different.

    Some would say [even in retrospect] that neither of those options was a wise choice. Had you put the $1,000 into your dresser drawer instead of the bank, you'd still have $1,000.

    First, I'd find a different bank.

    Second, the 10 year treasury has averaged about 3%. That's $30 per year. Your $1000 is now worth $1240, not figuring compounding.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • rawteam1rawteam1 Posts: 2,472 ✭✭✭

    @cohodk said:
    Second, the 10 year treasury has averaged about 3%. That's $30 per year. Your $1000 is now worth $1240, not figuring compounding.

    What?... That's some cheap insurance...

    keceph `anah
  • TwoSides2aCoinTwoSides2aCoin Posts: 44,293 ✭✭✭✭✭

    I bought some scrap gold for less. I'd like to buy some more tomorrow for even less.

  • Cougar1978Cougar1978 Posts: 8,222 ✭✭✭✭✭
    edited March 11, 2017 10:25AM

    I see it as a correction to what a lot of world gold issues are trading for as these are out there in huge numbers. Many investors want AGE, AGB close to melt too.

    Coins & Currency
  • 291fifth291fifth Posts: 24,345 ✭✭✭✭✭

    Generic gold is just that, generic. It is common, common, common. As a result it has been reduced to little more than disks of bullion of known content and weight.

    All glory is fleeting.
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